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The Labor Department said on Friday its producer
price index for final demand fell 0.5 percent after dropping 0.8
percent in January. It was the fourth straight monthly decline
in the PPI.
In the 12 months through February, producer prices fell 0.6
percent, the first drop since the series was revamped in 2009,
after being unchanged in January. Economists polled by Reuters
had forecast the PPI rising 0.3 percent last month and remaining
unchanged from a year ago.
The decline in producer inflation came despite a stabilization
in energy prices, which had weighed on price pressures in recent
months.
The dollar's strength against the currencies of the main U.S.
trading partners is helping to keep a lid on inflation.
The low inflation environment could prompt the Fed to hold off
on raising interest rates until much later this year, despite a
tightening labor market.
The volatile trade services component, which mostly reflects
profit margins, fell a record 1.5 percent in February, after
rising 0.5 percent in January. It was pulled down by a 13.4
percent drop in margins at gasoline service stations.
A key measure of underlying producer price pressures that
excludes food, energy and trade services was unchanged after a
record 0.3 percent drop in January.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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